To replace, or not to replace, THAT is the question:
The heat is on for Republicans in the Senate, who are caught between a rock and a very hard place, indeed. Given a mandate by their base to repeal and replace ObamaCare, their political futures may be in peril.
Because voters won’t be satisifed with just repealing the Affordable Care Act. Americans are so addicted to health insurance that they value coverage more than they value care. Which is why tens of millions of them are waiting with baited breath for an Act of Congress that will fix the Great American Health Care Dilemma – by “replacing” ObamaCare.
The question is, what exactly do they expect Congress to replace that terrible law with?
The semantics don’t matter, as long as the result is a return to the good old days of health insurance, when we enjoyed $5 copays, and $200 deductibles. For only a thousand bucks a year in premiums.
But no matter what the outcome of their efforts may be, Republicans aren’t going to make that happen with the current legislation they are crafting. Reigning in the prices and benefits of health insurance is going to require legislation that repeals much more law, than just ObamaCare.
To understand why takes an appreciation of the health insurance industry’s unique position in the American economy. It is a prestigious club, dominated by a few giant players: in 2013, over $744 billion dollars was paid by Americans toward private health insurance premiums. Two-thirds of that – almost half a trillion dollars – went to just 25 health insurance companies.
That’s a lot of money and it’s a lot of political power, too, which the health insurance lobby has used wisely. Such a staggering degree of success has only been possible with the support of generations of legislators, enacting laws that not only protect and prop up the health insurers, but also grant them superpower abilities unlike any other industry.
Laws like the Health Maintenance Organization Act of 1973. This was signed by President Nixon despite the fact that his adviser John Ehrlichman (in a taped Oval Office conversation) had informed him exactly how the Kaiser Permanente HMO model was going to make its profits: “the less care they give…the more money they make.”
Surprisingly most people have never even heard of the HMO Act, and they certainly aren’t clamoring for its repeal. They should be, though. For over forty years it has had far greater implications than ObamaCare.
The HMO Act gave us the concept of “managed care” in the form of health insurance networks. These exclusive arrangements pit two competing interests – health insurance companies, and health care providers – against each for control of the patient’s (or consumer’s) money, with the upper hand given to the insurers.
So-called Health Maintenance and Preferred Provider networks restrain my trade as a physician and restrict your consumer choice as a patient, in ways that would not be acceptable – much less legal – if applied to other aspects of our daily lives. Just imagine some giant, corporate third party (that you pay money to) being able to tell you that you couldn’t eat at a particular restaurant because it’s out-of-network. That wouldn’t make any sense to anyone; in fact the attempt might even make national headlines.
And yet, Americans have become so inured to the idea of their health care being managed, that they will let that same company deny a test their doctor wants to order. They will even grudgingly accept being denied the ability to continue seeing their doctor, if that physician drops off the network rolls.
That’s not the worst of it, either. Thanks to ever increasing deductibles and out-of-pocket responsibilities, many patients now have to pay for virtually all of the health care they receive in any given year. But at what price? By that I mean, how much are they going to pay for the services they receive?
When health insurance companies negotiate contracts with health care providers, the two sides come to an agreement on how much the provider will be able to charge the insurer for their services. It is what’s known as the “allowed amount,” and although the patient may have absolutely no input into the price – and no way to renegotiate it – if they haven’t met their deductible, then they will be on the hook for paying it in full.
In Federal Trade Commission parlance this practice is called price-fixing, and it is illegal. In any other industry besides health care, that is.
It’s time for Congress to take up a repeal of the Health Maintenance Organization Act, but there are many other things that should be repealed, too. Every law and regulation that stifles and prevents competition among health insurance companies should be rolled back, and replaced by new laws that level the playing field and encourage the entry of new companies into the mix.
Laws that favor health insurance being purchased on the individual market, rather than through an employer. Laws that allow the sale of health insurance across state lines, which will result in more insurers selling in every state. Laws that eliminate the open enrollment period, which has no benefit other than to lock you in to whatever plan you choose for a solid year, severely restricting your consumer choice.
If Americans want premiums (not to mention deductibles) to come down, then there is only one possible solution – a free market where health insurance is sold in a truly competitive manner. A free market where health insurance companies are forced to compete with each other for your business, instead of your employers’. A free market where you as the consumer can change plans in the middle of the year just because you found a better deal, instead of having to lose your job or a family member in order to do so.
Unfortunately, that isn’t going to happen with the current ObamaCare ‘replacement’ being considered in the Senate. It will only occur when Congress grows some political fortitude, and decides to repeal, repeal, and then repeal some more.
Or as Journey once might have sang, Don’t stop repealin’…
It’s not the COSTS of health care that are outrageous…it’s the CHARGES.